Question

Exercise 3-3 (Video) The ledger of American Company has the following work in process account. ? Work in Process-Painting 5/1 Balance 3,790 5/31 Transferred out 5/31 Materials 5,930 5/31 Labor 4,068 5/31 Overhead 2,280 5/31 Balance Production records show that there were 600 units in the beginning inventory, 30% complete, 1,700 units started, and 1,500 units transferred out. The beginning work in process had materials cost of $3,040 and conversion costs of $750. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process. How many units are in process at May 31? Work in process, May 31 800 units LINK TO TEXT LINK TO TEXT LINK TO TEXT VIDEO: SIMILAR EXERCISE What is the unit materials cast for May? (Round unit cost to 2 decimal places, e.g. 2.25.) The unit materials cost for May LINK TO TEXT LINK TO TEXT LINK TO TEXT VIDEO: SIMILAR EXERCISE What is the unit conversion cost for May? (Round unit cost to 2 decimal places, e.g. 2.25.) The unit conversion cost for Mays LINK TO TEXT LINK TO TEXT LINK TO TEXT VIDEO: SIMILAR EXERCISE What is the total cost of units transferred out in May? Bookmarks chrome://baakmarks The total cost of units transferred out in May

Answer 1

Solution 1:

Units in WIP on May 31 = Beginning WIP + Units started - Units completed and transferred

= 600 + 1700 - 1500 = 800 units

Solution 2 & 3:

American Company
Production Cost report - Painting Department
Computation of Equivalent unit of Production
Particulars	Physical Units	Material	Conversion
Units to account for:
Beginning WIP	600
Started into Production	1700
Total units to account for	2300
Units accounted for:
Unit completed & Transferred out	1500	1500	1500
Units in ending inventory:	800
Material (100%)		800
Conversion (40%)			320
Equivalent units of production	2300	2300	1820

American Company Computation of Cost per equivalent unit -Painting department
Particulars	Material	Conversion	Total
Opening WIP	$3,040	$750	$3,790
Cost Added during Period	$5,930	$6,348	$12,278
Total cost to be accounted for	$8,970	$7,098	$16,068
Equivalent units of production	2300	1820
Cost per Equivalent unit	$3.90	$3.90

Solution 4 & 5:

American Company Computation of Cost of ending WIP and units completed & transferred out - Painting Department
Particulars	Material	Conversion	Total
Equivalent unit of Ending WIP	800	320
Cost per equivalent unit	$3.90	$3.90
Cost of Ending WIP (Equivalent unit * Cost per equivalent unit)	$3,120	$1,248	$4,368
Units completed and transferred	1500	1500
Cost of units completed & Transferred (Unit completed * cost per equivalent unit)	$5,850	$5,850	$11,700